Question : Indian Rupee plunged to all time low of INR 85.10 against US dollar. How it will impact the import status of the country.
Option 1: Imports will increase
Option 2: Imports will decrease
Option 3: No change
Option 4: Either a or b
Answer (1)
18th Jan, 2024
Correct Answer:
Imports will decrease
Solution : The correct answer is (b) Imports will decrease
A depreciation in the Indian Rupee means that it takes more Rupees to purchase the same amount of foreign currency (in this case, the US dollar). As a result, the cost of importing goods and services from other countries becomes higher. This makes imports relatively more expensive, and therefore, it is expected that imports will decrease.
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